Reflections from the Maldives Tax Forum 2025.
When the Maldives Tax Forum 2025 convened this year, it did not simply skim the surface of global reform; it plunged into the deep waters of international tax cooperation. The theme encompassed the relevance of BEPS 2.0 (Base Erosion and Profit Shifting) specifically to the Maldives.
With a panel comprising Laura Stefanelli, Senior Advisor at the OECD’s Centre for Tax Policy and Administration; Sausan Saeed, Deputy Director of Taxpayer Education at MIRA; and Suresh Perera, Principal, Head of Tax and Regulatory at KPMG with over 25 years of regional experience, the session was a confluence of local insight and global perspective. This article is meant to serve as a reflection on the discussions that followed in the forum instead of a verbatim log. I have tried to synthesise what was said, what it meant, and why it matters.
To the untrained eye, international tax reform might seem like a matter for the big nations where MNEs (Multinational Enterprises) with billion-dollar balance sheets call home. But as the panellists quickly established, it matters deeply to the hosts too and namely the Maldives. This is because even if we are not exporting capital or housing headquarters of MNE giants, we are certainly hosting their revenue. So, it matters.
Tourism is our lifeblood, and that lifeblood flows through booking platforms, global service providers, and e-commerce platforms with no physical presence on our shores. Without reform, that revenue risks slipping through outdated tax rules. The OECD’s BEPS 2.0 project, particularly Pillar One and Pillar Two aims to stop that leakage.
Pillar One proposes a bold shift in taxing rights. Under Amount A, countries like the Maldives could tax very large multinational groups (those with over €20 billion in global revenue) even if they lack a physical footprint locally. The implementation hinges on international consensus. At least 30 jurisdictions representing 60% of in-scope MNEs must sign the multilateral convention. This is yet to happen.
So, while the destination principle behind Pillar One is aligned with our economic realities to tax where the customer is, the rulebook is still on the drafting table. Until then, it remains a policy aspiration instead of a concrete revenue plan.
On the other hand, Pillar Two is in motion. In this way, the Qualified Domestic Minimum Top-up Tax (QDMTT) should be our priority. The basic premise is that MNE groups with consolidated revenue over €750 million must pay at least 15% effective tax on profits in every jurisdiction they operate. Otherwise, another country gets to collect the shortfall.
If the Maldives enacts a QDMTT, we collect first. If not, the home country of the parent company can collect under the Income Inclusion Rule (IIR). If that jurisdiction opts out too, another affiliate’s country can grab the revenue via the Undertaxed Profit Rule (UTPR).
So yes, the QDMTT is our ticket to retaining tax rights. Either we tax it or give our tax money to another country. It is better to collect it and give it as an explicit gift via a grant instead of having it leak.
Historically, the Maldives has relied on tax holidays, reduced corporate rates, and SEZ incentives to attract investment. However, if the new rules are implemented, there will be a catch. Under Pillar Two, those income-based incentives could backfire. If they push a company’s effective tax rate below 15%, that benefit simply gets taxed elsewhere.
Substance. This means real payroll, tangible assets and substantive local operations. The GloBE (Global Anti-Base Erosion) rules include a substance-based carve-out that allows a portion of profits linked to real economic activity to be excluded from the top-up tax calculation.
Incentives that tie directly to tangible investments or employment, like infrastructure grants, wage subsidies, or R&D support are not only compliant but strategic. Furthermore, non-tax incentives such as ease of doing business and regulatory certainty could also be utilised.
This means policymakers must adopt a two-track approach. Traditional incentives can still be used for SMEs (Small and Medium-sized Enterprises) and startups (below the €750 million threshold). Nevertheless, these non-tax incentives must be used for the large MNEs caught within the rules of Pillar Two.
This was perhaps the most pragmatic portion of the discussion. While all BEPS measures matter, developing countries cannot be expected to roll them out all at once. The panel laid out a sequence of implementation tailored to our context:
The consensus amongst the panellists was clear: start small but smart. Build up as capacity allows.
Final Reflections
In Conclusion, as per the panellists, the QDMTT should not be treated as optional. It is the minimum viable defence against revenue leakage. Delay means loss. Implementing it swiftly would allow the Maldives to tax in-scope profits locally before they vanish into foreign treasuries.
International tax is no longer the quiet back office of economic policy. On the contrary, it is front and centre a lever for growth, fairness, and resilience. And for the Maldives, a nation that knows a thing or two about balancing on the edge of climate and capital, embracing reform is not just smart, it’s strategic. It was put forward that 15% is the new floor, the new 0. Nevertheless, we must always think fundamentally about a policy’s philosophy and usefulness within our context before getting bogged down in its mechanics. If global tax policy were a dinner party, BEPS and the OECD would be the guest who insists on splitting the bill fairly. Frankly, it is about time we checked what everyone else has been ordering before we pay our share.